Although price probably will be the most important factorinfluencing energy decisions after this winter, it is the otherthings, such as reliability and customer service, that so far havedetermined the winners and losers in the gas sales business,according to a new survey by RKS Research & Consulting.

A majority of American businesses say reliable supplies and goodservice remain the most important factors in their gas purchasingdecisions, RKS said after interviewing about 800 energy purchasingmanagers for large endusers during the months of May and June.

Only the largest transportation clients – those who pay brokersor marketers for delivered gas – shop solely on the basis of price,according to the survey. These transportation clients gave highersatisfaction ratings to marketers compared to regulated local gasutilities.

“These scores indicate that business customers are reducingnatural gas to a commodity purchase, a perception that fails todistinguish one supplier from another,” said Rick Ginter, RKSdirector of research and project leader for this survey. “Thosesuppliers that add services in such areas as energy management,consulting and billing and increase their customer communicationsstand the greatest chance to preserve and grow market share.”

The Year 2000 Natural Gas Business Customer Survey includes thedetails of telephone interviews with 106 transport clients, and 694commercial and industrial sales customers who depend on a singlegas utility for energy supply and services.

The survey indicates rising interest among business customers inadditional gas-fueled products. For instance, six in 10 commercialtransport customers find appeal in gas-powered air conditioning,while half the industrial transport customers are intrigued byon-site electricity generation.

This survey is RKS’ third in-depth poll of corporate purchasersof natural gas in the last five years. It reveals strikingdifferences between sales and transport customers. For example,while all customer segments agree that the guarantee of a reliablegas supply is their most important purchase criterion, transportclients place price next in importance. In contrast, salescustomers place price behind supplier honesty and fulfillment ofits service obligation.

More than half of the businesses surveyed now have the option tochoose their gas suppliers, according to the RKS data. Among allbusiness customers interviewed by RKS, 13% reported switching gassuppliers. Nearly half of these respondents – 48% – say they arenow paying lower prices for their natural gas.

Transport customers also remain the most critical marketsegment, according to the survey. For example, more than half – 52%- of commercial transport customers feel they pay too much to theirlocal gas distributor. A third of transport customers rate theirmarketers high in value received. And only a quarter – 23% – seetheir local distribution company as more than a source of naturalgas and remain critical of their local supplier’s businessretention efforts.

A quarter of transport clients say that switching or dividingenergy supply from delivery has increased their administrativeburden. Sales customers cite the extra workload as a major reasonfor not switching or unbundling suppliers.

“This finding may actually create opportunities fordistributors,” said Ginter. “Taking the lead to combine billingstatements, creating transparent systems and assigning a singlepoint of customer contact may all help to raise profile of thelocal supplier.”

For copies of the study contact Joan Eckels at (914) 277-6900,ext. 102.

Rocco Canonica

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